Not radical Budget many had expected
NEXT week may be the last that Jacinda Ardern has in the House before taking time off in midJune to have her baby and leaving Winston Peters in charge.
As the Government’s No 1 political asset, she will be engaged in the marketing of this week’s Budget during Question Time.
It may be a Coalition Government, but the Budget is very much a Labourbranded exercise, despite enormous gains by New Zealand First and significant gains by the Greens.
In the next few weeks, Ms Ardern will want to reinforce that before Mr Peters is thrust into the role of having to front for Labour.
Had it been a polarising Budget, Ms Ardern’s involvement may have been more critical.
But it was not that sort of Budget. There was no move that was singularly unpopular that needed defending.
It has been attacked by the Left for not being radical enough. That was predictable enough.
What damage National can do over the Budget and how long it can drag it out is less predictable.
At this stage, National is getting among the weeds, with mixed results. Its claim that Pharmac’s funding has been cut is not true, but it’s complicated.
Overall, Pharmac has been given more money to buy drugs, although it will now also buy for district health boards. Savings of $194 million are forecast because it will now be buying in greater bulk but its budget has not been cut.
National’s claim that it increased new health spending last Budget more than Labour did this time is true.
But it was an unusually large year by being the first stage of the pay equity settlement for care workers, but so was the rise for midwives in this year’s Budget. If new spending is the measure that matters most, National has a fair point.
And new or extra spending is the way Labour described its election campaign promises of $6 billion in education over four years and $8 billion in health.
It didn’t say $8 billion more in health services — but not counting any pay increases for midwives or nurses.
Ms Ardern had better be ready. National will have a field day on that next week.
Overall health funding has risen in this year’s Budget to $18.07 billion, from $17.18 billion last year, as it has risen every year.
The same goes for overall spending on public services. In total, core Crown expenses (health, education, welfare etc) in this Budget amount to $86.7 billion compared with
$81.7 billion in the financial year about to finish.
National isn’t saying Labour should have spent less, and nor is it saying it should have spent more.
National is essentially saying people would have expected a more radical budget, going by Labour’s promises.
But when the main complaint from the Left and the Right is that it should have been more radical, Labour can bat that away easily enough.
A more sustainable line of attack is coming from National’s former education minister Nikki Kaye. She has been listing in detail what Labour’s election promises were and wondering what happened to them.
It may seem bread and butter for the Opposition to cry broken promises, but Labour is staying strangely quiet. It doesn’t say that it will implement the long list of promises over the threeyear term.
The fact is that many of Labour’s election promises no longer have status as promises unless they were mentioned in one of four documents.
If they were not mentioned in the Speech from the Throne, were not part of the 17 policies in the 100Day Plan (which have already been implemented) or got a mention in New Zealand First’s coalition agreement or the Green Party’s confidence and supply agreement, they are no longer promises; they are just Labour policy, sitting on a shelf.
Some ministers have not yet caught up with that. Some have continued to say in media interviews that X or Y policy will be implemented during the threeyear term because it was in the manifesto.
Labour’s Fiscal Plan developed before the election has no relevance in terms of commitments.
The partner agreements were largely New Zealand First and Green Party policies. And in those documents, only one Labour policy was negated — water rental for farmers.
In effect, Labour’s new manifesto is the Speech from the Throne which is largely short on specifics — which is the reverse of Labour’s previous position where it had copious amounts of detailed policy, none of which got implemented.
Education is one of the few areas in which sums of money were promised in the Speech from the Throne — the $6 billion of new spending over four years.
The promise of $8 billion extra in health services over four years is not mentioned in the Speech from the Throne.
That doesn’t mean it is not going to happen. But we won’t know by the next election, because it is a threeyear term, not a fouryear term.
And nor does it mean that policies not mentioned in the four documents will not be implemented. That is possible if they get enough support.
Ms Ardern and Finance Minister Grant Robertson suggest that this reduction in Labour commitments is just a fact of MMP when having to accommodate other parties.
Most of the 17 policies in the 100Day plan, including the Families Package, were Labour’s and will cost $5.5 billion over four years.
But it leaves Budget 2019 and Budget 2020 wide open.